You may be more cautious in terms of how many people you want to bring on. But employers are still looking for talent. And you can also see that in our talent shortage surveys that we do on a regular basis, that employers are still finding it difficult to find exact skill sets that they want, exactly when they want them. So overall, it’s rational, and I think it remains competitive, but we can see pricing stability across all of our markets and that’s reflected in our staffing and overall GP margins.
Trevor Romeo: Great, Thank you very much.
Operator: Thank you. Our next question comes from Mark Marcon with Baird. Your line is open.
Mark Marcon: Hey, good morning and thanks for taking my questions. A few different questions. One really quick one. This term as a total percentage of GP, including RPO, where did that come in, Jack?
Jack McGinnis: Mark, that came in at 16.8% in the first quarter for us. So I know we’ve talked about that in the previous quarter where it came down a bit. What you’re seeing in the first quarter, Mark is seasonally it’s a lower staffing quarter for us just in terms of GP dollars typically. So it’s — PERM actually sequentially — actually improved very, very slightly in a dollars perspective. So you’re seeing a little bit of a higher mix work in at that ratio of 16.8%.
Mark Marcon: Okay, great. And then just a couple of very short numbers questions, this with regards to Experis in terms of the trends, how much were the IT healthcare projects and particularly in the US and if we strip that out, how did things look and would you expect things to still be stable to improving if we strip out those IT staffing projects, unless those are sustainable and a new promising line of business.
Jack McGinnis: Thanks Mark. I think on the US Experis business, yeah, we did call out that healthcare IT. We did see a good deal of work in the first quarter, I would attribute that to some of those, you know, those go-live works in the hospital system were deferred during 2023. So we did see a spurt of that activity in the first quarter. And we did call it out as a big project related because I wouldn’t anticipate that that level of activity will continue in that specific space in future quarters here. A bit of that was considered a catch-up if you will. But what I would say, maybe broader to your point, is I think we are seeing generally relatively stable trends in the U.S. Experis business at lower levels of course, based on what we experienced last year.
And I think, Jonas’ point, I think when we look at enterprise tech, still very sluggish in terms of demand, but convenience holding up a bit better. So, as we step back and we look forward, I would expect the underlying stable trends that we talked about will continue. We’re not seeing a big step up in enterprise, and we’re seeing convenience kind of continuing at current levels. And as we go forward, you know, we start the anniversary, the second quarter of last year was, you know, the biggest decline of the year. And so we will anniversary that and that will help a bit on the year-over-year trend, as we go into the second quarter. So that’s how I would say it at this point, kind of in-line with what Jonas said. No inflection point at this point, but we are seeing stability.
Mark Marcon: Right, and then, Jonas, if I could ask a couple of kind of bigger picture questions. One with regards to just kind of the US, predominantly the Manpower business, when we think about like what’s happened with regards to higher wage rates, particularly in certain states that have come through, and then thinking about all the various gig opportunities that are out there that are available to individuals. What are you seeing just in terms of the quality of the people that you can place? And what is the productivity level? Or how are clients responding to these higher wage rates? What are your thoughts there?
Jonas Prising: So, Mark, I think what we’re seeing in the Manpower business is clearly the headwinds from a manufacturing sector that’s had a tough time now frankly, for a number of years. And we’ve seen that reflected in PMI. But from a demand perspective, what we see playing out in the U.S., is really still an effect of the pandemic and the post-pandemic. So the dislocation in the U.S., market during the COVID pandemic was much bigger than it was – case in any other place across the world. And so lots of workers left their workplaces, then they came back and employers were really faced with shortages that were scrambling to fill. In some cases, such as in the tech sector, they really engaged in a pandemic boom. But every category of employer was struggling really hard to find the talent that they needed to recover and then take advantage of the post-pandemic demand surge for products and services.
What we’re seeing now though is that employers are still holding on to their workforce. They’re much more surgical in their hiring of temporary staff. And as an industry, we’re at the leading edge of a cooling labor market. What’s unusual in this cycle is the length between the decline in the temporary staffing industry and a more rapid cooling to a limited degree, we still believe, of the broader labor market. And we can just reflect on the very strong labor market numbers we saw at the end of March. But we still think that is going to play out. So employers are cautious now. They are still navigating an uncertain environment, high inflation. But in terms of wages, the labor markets are still so tight that employers understand they are having to pay those wages, which of course benefits workers that have real wage increases, which in turn continues to drive good consumption in the U.S., economy which also then may fuel some additional inflation but above all provides purchasing power to the consumers.
